I checked around the archives and previous posts and did not see this covered so here goes:

I have employer granted stock options that vested this year. I want to exercise them in the next two months. BTW, the company is in the process of being purchased for cash so the stock I own will be converted to cash. So, I could convert them to cash via exercising the options. Any thougths on this, good or bad? Or I can wait and see what the buying company will do with my options and act then.

Either way I am wondering what my liabilities will be for this transaction. I assume I pay ordinary income tax since I have not held the options more than one year. Do I also have to pay another tax or penalty?

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